According to the most recent census data, 36.8 million Americans live in poverty, slightly more than 11 percent of the population. Nearly half of the world’s population — about 3.5 billion people — fall below the poverty line for middle-income countries, and 8.5 percent are considered living below the extreme poverty line for low-income countries.
At the same time, inequality has exploded over recent decades. From 1979 to 2020, incomes for the most affluent .01 percent of households in the United States grew 17 times faster than for people earning in the bottom 20 percent. According to the Congressional Budget Office, the richest 1% in 2021 earned almost 139 times as much as the bottom 20%. According to the Federal Reserve, the top 10% of households possess two-thirds of the country’s wealth, defined as total assets less debts. The bottom 10% of households possess 2.5%.
“Poverty is not new,” said Anne Phillips, emeritus professor at the London School of Economics’ Department of Government. “Inequality is not new. These are clearly things we should worry about. But should we worry more about poverty or the inequality?”
Phillips, known for her contributions to political theory, democracy, representation, equality, and feminism, spoke last month at the Institution for Social and Policy Studies (ISPS), part of the Program on Ethics, Politics, and Economics’ (EP&E) Robert H. Litowitz Lecture Series. The series was established to honor a scholar who died while attending Yale Divinity School, continuing to explore his interests in public ethics and policy that cross disciplines and bridge diverse religious traditions and cultures.
“We are tremendously grateful for the opportunity to host these lectures as a fruit of Robert Litowitz’s vision and generous spirit,” said Ana De La O, EP&E director and ISPS faculty fellow. “We are also honored to welcome his sister, Laurie Litowitz, an international artist, visiting us from her home in Mexico.”
Phillips began her lecture with a discussion of American philosopher Harry Frankfurt, who argued that people who care about other people having more than them when they have sufficient resources to live a decent life become trapped in envy and distracted from what really matters.
As a further example of reasons for worrying less about inequality, she cited Shekhar Aiyar, a scholar who has held senior positions in the International Monetary Fund and recently wrote about how India and China have raised more than a billion people out of poverty.
“From a global perspective, the dominant public discourse about liberalism’s malign impact on economic inequality is alarmingly blinkered,” Aiyar said in an essay published earlier this year. “The sharp rise of within-country inequality in rich countries needs urgent remedy but applies to a set of countries that constitutes only about one-fifth of the global population.”
Phillips noted further that the extreme concentration of wealth, particularly in the top .01%, can create a sense of helplessness and can make the idea of equalizing incomes or wealth seem like a “ludicrous pipe dream.”
She argued nonetheless that the reduction in absolute poverty does not negate the importance of addressing rising economic inequality within countries. Indeed, she said, the very fact that absolute poverty is declining while economic inequality is rising sharply provides a strong case for focusing on inequality, rather than dismissing it as a secondary concern.
“Focusing only on poverty encourages the delusion, particularly characteristic of Euro-American thinking, that we already do have — and had for decades and centuries — equality in our fundamental status,” she said. “We tell a story about ourselves in which ideas of all humans being born equal supposedly form the basis of our societies and democracies.”